FAQ: Crop-share Landlords Asking Questions About ACRE

Clearing up questions for landlords is an important part of signing up for the program.

FAQ: My crop-share landlords keep asking me questions about ACRE. What I’ve gathered from meetings and reading ISU Extension analysis is if I think crop prices will fall below $3.71 and $9.05 for the 2009-10 marketing year, and I have higher than average farm yields, and the farm does not tend to yield low when the state yields high, the decision to enroll my farm in ACRE is a no-brainer. I give up approximately $5 per acre by enrolling in ACRE but I gain the chance of getting a much higher return.

Answer: Provided by ISU Extension farm management specialist Steve Johnson.

Correct. The 2009 ACRE trigger prices assume normal state yields in 2009 equal to the 5-year benchmark of 171 bushel per acre corn and 50.5 bushel per acre soybeans. The 2009 ACRE trigger prices was updated following the July 10 USDA Crop Supply/Demand Report. The next USDA crop report and supply/demand report that could impact these prices significantly will be released August 12. These reports will update the 2008 crop price for the state and farm ACRE revenue guarantees, but little change is expected.

The August WASDE Report will update the 2009 crop supply/demand forecasts and the projected 2009-10 crop prices. If the midpoint prices in this report fall much below the July forecasts of $3.75 per bushel corn and $9.30 per bushel soybeans, the result could be a “rush to sign-up for ACRE for 2009” before the Friday, August 14 deadline.

Yes, the cost of 2009 ACRE enrollment is roughly $5 per corn acre annually or $20 over 4 years. That’s because you must give up 20% of your Direct Payment when you enroll in ACRE. This is a small price to pay to create a potential larger 2009 ACRE payment made on the planted acres for a farm enrolled in ACRE.

The higher farm yields help create a higher farm productivity index (farm benchmark yield divided by the state benchmark yield) to determine the final ACRE payment. Since your farm’s 5-year yield trends with the state yield, it should be easier to trigger the farm’s revenue guarantee the same year the state revenue is triggered.

If you have a question you'd like answered regarding the new USDA farm program, please send it to [email protected]. We will pass it on to the ISU Extension specialists or to the program specialists at USDA's Farm Service Agency office in Des Moines and they will send you the answer.

Also, ISU Extension farm management specialist Steve Johnson keeps Iowa farmers and landowners updated using his ACRE Answers web page at www.extension.iastate.edu/polk/farmmanagement.htm

TAGS: Soybean
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